Interest rates on home loans edged up over the past week, and multiple forecasts have fixed rates making a more significant move north over the next week.
In its
Origination Insight Report March 2016, Ellie Mae Inc. reported average 30-year fixed rates on conforming mortgages at 4.12 percent last month.
Thirty-year rates
sank compared to February, when the average was 4.22 percent. But the 30-year rate worsened from 4.04 percent as of March last year.
Conventional 30-year rates were 4.19 percent last month, while loans insured by the Federal Housing Administration averaged just 4.07 percent.
The lowest average interest rate was reported for mortgages guaranteed by the Department of Veterans Affairs:
3.90 percent.
Freddie Mac reported in its Primary Mortgage Market Survey for the week ended April 21 that 30-year fixed rates were 3.59 percent.
Thirty-year rates edged up from the previous report, when the average was 3.58 percent.
Freddie Mac Chief Economist Sean Becketti explained, “Volatility in financial markets subsided over the past week, allowing Treasury yields to stabilize.”
The 30 year was lower, though, than 3.65 percent one year prior.
Mortgage-backed securities prices have deteriorated since Freddie conducted its survey, according to Joe Farr, director, MBS Quoteline.
“The[re] has been a 50-basis-point drop in MBS prices since the Freddie Mac survey was conducted earlier this week,” Farr explained in a written statement to Mortgage Daily. “Since rates rise when MBS prices fall, Thursday’s actual rate is about five basis points higher than the rate reported in the survey.”
Home-loan rates are creeping up over the next seven days, Bankrate.com Chief Financial Analyst Greg McBride expects.
“We’re seeing an up tick in mortgage rates leading into next week’s Fed meeting, just in case the Fed drops hints of a possible June rate hike,” McBride told Mortgage Daily in a written statement.
Mortgage Daily’s analysis of Treasury market activity suggests that fixed mortgage rates could be roughly 7 BPS higher in next week’s survey from Freddie.
More than two-thirds of Bankrate.com panelists surveyed for the week April 21 to April 27 aren’t as pessimistic and don’t expect mortgage rates to move more than 2 BPS over the next week. An increase was predicted by 31 percent, and none expected a decline.
Fannie Mae, in its Housing Forecast: April 2016, predicted 30-year fixed rates will average 3.7 percent all of this year.
Jumbo rates were 2 basis points more than conforming rates in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended April 15. The jumbo-conforming spread swung from a negative 3 BPS a week prior.
Freddie reported 15-year fixed rates at 2.85 percent, lower than 2.86 percent in the week ended April 14. Fifteen-year rates were
74 BPS less than 30-year rates. The spread widened from 72 BPS seven days earlier.
Average rates on five-year, Treasury-indexed, hybrid, adjustable-rate mortgages were 2.81 percent in Freddie’s most-recent survey, lower than 2.84 percent in the last report.
Fannie expects hybrid ARMs to average 3.0 percent in both the second and third quarters then rise to 3.1 percent during the following three quarters.
One-year ARMs averaged
2.81 percent as of Thursday at HSH.com. One-year ARMs were 2.41 percent the prior Thursday. Freddie previously reported that the one-year ARM averaged 2.44 percent in the week ended April 23 last year.
The one-year Treasury yield, the index for the one-year ARM, closed at 0.56 percent Thursday, according to Treasury Department Data, a basis point more than last Thursday.
At 0.90 percent as of Wednesday, the London Interbank Offered Rate — or LIBOR — was
a single basis point more than in last week’s report, Bankrate.com data indicate.
ARM share of closed loans was 4.4 percent in March, according to Ellie, thinner than 5.1 percent a month earlier but wider than 4.2 percent a year earlier.
In the most-recent Mortgage Market Index report, ARM share of rate lock volume was 8.5 percent, thinning from 8.8 percent one week previous.
